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TMI Blog2017 (2) TMI 1534X X X X Extracts X X X X X X X X Extracts X X X X ..... re like, utilities, transport, oil and energy and hence the ability to disturb social harmony and interactions, urge to cause unrecoverable damages to businesses and ability to harm national security posture. Admittedly, the assessee is imparting very valuable services in this regard and training officials of police, banking, and other personnel in technical field. The grants received by assessee are mainly from Government. One of the major objections of Assessing Officer was that assessee was imparting services to NOSSCOM. This objection is devoid of any merit because it is the predominant object of assessee which is to be examined for deciding whether the assessee was carrying on charitable activities or not. The assessee was registered u/s 25 of the Companies Act which clearly shows that it could not carry on any activities for profit purposes. It is well settled law that while carrying on pre-dominant objects, if the assessee is earning some incidental surplus that will not prejudice the assessee s claim of being charitable in nature - Appeal of the Department is dismissed. - ITA No. 3306/Del/2016 - - - Dated:- 28-2-2017 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by assessee and observed that the assessee was neither in the field of education, nor in the field of medical relief or relief of poor. He pointed out that the benefit of exemption u/s 11/12 could be extended to assessee only after verifying the applicability of the proviso to section 2(15) since its activities were falling within the scope of general public utility . He noted that during the year under consideration, the assessee had received income under the following heads :- Sl.No. Heads Amount (in Rs.) 1 Donation 2,00,00,000 2 Grants Apportioned 1,21,87,672 3 Participation Fees 3,86,799 4 Membership Fees 6,81,250 5 Sponsorship Fees 1,03,90,522 6 Interest from bank and on refund 1,60,223 4. He observed that the grants apportioned sponsorship fees were received from different parties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cil of India Indian Banking Association. 2. Sponsorship of joint event in the nature of a road show conducted by VCIPL and Data Security Council of India to promote VCIPL's services. 3. Sponsorship of annual IT Security Summit conducted by Data Security Council of India. 6. From the above, he concluded that the assessee was providing professional services to the various organizations, as per their requirement, in a systematic manner. He further observed that the assessee had been providing services to a particular industry to safeguard their business interest and not to the general public at large, which is the main element for charitable purpose. He, accordingly, concluded that amended proviso to section 2(15) is applicable in the case of assessee and determined the total income at Rs.49,32,480/- as under :- Total Income declared NIL Add:- i. Surplus as per Income Expenditure A/c Rs. 6,24,705/- ii. Depreciation disallowed Rs. 2,71,266/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company. 4. To promote awareness or assist in the operation or implementation of the Information Technology Act, 2000, and any other relevant Act(s) and any legislation, rules, regulations and guidelines as amended from time to time and prevailing for the time being in force, which may seem conducive to the Company's objects. 8. The assessee pointed out that in view of the objects to be carried out by the assessee, it was evident that assessee was setup with the predominant objective to improve national capabilities by promoting data protection, develop security and privacy codes and standards and encourage implementation of the same. It was further pointed out that while the immediate goal of the assessee was to raise the level of security and privacy of IT and BPO service providers to ensure that India is secure destination for global sourcing, the assessee also promoted best practices for domestic industry segments like banking, telecom and e-governance. It was further pointed out that unless India is able to project itself as a destination having capability to protect the confidential data, the entire IT and BPO industry would not be able to survive. Further, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that not only there is an overriding mandate on the appellant to pursue its objects and carry on the activities on no-profit basis, but the appellant, as a matter of fact, too, carries out its activities on no-profit basis. None of the receipts of the appellant were from any of the commercial activities. DSCI is also focused on capacity building of Law Enforcement Agencies for combating cybercrimes in the country and towards this; it operates several cyber labs across India to train police officers, prosecutors and judicial officers in cyber forensics. DSCI so far has trained more than 49,000 personnel from police, prosecution, judiciary, banking industry and other government departments in various cyber forensic trainings which range from 5-day full time hands on trainings to short courses and few guest lectures. The overall model has been conceptualized based on the Public-Private-Partnership model through DSCI's cyber lab program. DSCI in involved in the following activities for capacity building of Indian Law Enforcement and other departments: a) Conducts 5-day training programs as well short courses of 3 days and awareness program of 1 day for police offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Since, the genuineness and reasonableness of the activities of the appellant is not in question and it is only the nomenclature which has resulted in the denial of the exemptions, the same is incorrect. In view of this, ground 2 and 3 of appeal are allowed. 10. Being aggrieved, the Department is in appeal before the Tribunal and has taken following grounds of appeal :- 1. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in holding that the activities carried out by the assessee are not in the nature of trade, business or commerce or rendering services in relation to the same. 2. Whether on the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.42,32,815/- made by the AO on account of restricted grants. 3. The appellant craves leave to add, to alter or amend any grounds of appeal raised above at the time of hearing. 11. Ld. DR referred to page 4 of the Assessing Officer s order and pointed out that Assessing Officer after examining the nature of activities carried on by the assessee pointed out that the same satisfies the features of business. He further pointed out that the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Ld. counsel further referred to page 57, wherein, order u/s 80G(5)(vi) is contained entitling the assessee exemptions under the said section, wherein, the following conditions have been mentioned, which are reproduced hereunder :- 2. This exemption is valid for the period A.Y. 2010-11 ONWARDS TILL IT IS CONDITIONS :- ii) Every receipt issued to donor shall bear the number and date; of this order and shall state the date up to which this certificate is valid from A.Y. 2010- 11 ONWARDS TILL IT IS RESCINDED. 13. Ld. counsel pointed out that the Assessing Officer has passed the order on 31st March, 2014 after the grant of registration u/s 12A and exemption u/s 80G though he had specifically examined the nature of receipt as per direction of the Tribunal. Ld. Counsel relied on the decision of Hon ble Delhi High Court in the case of Institute of Chartered Accountant of India Another vs. DIT (E), (2013) 358 ITR 91 (Delhi). 14. I have considered the submissions of both the parties and perused the record of the case. The facts are not disputed. The activities undertaken by assessee are in the field of cyber security for increasing level of security and privacy of IT and B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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